ECB CUTS RATES

The European Central Bank cut all of its main rates and said it
would buy corporate bonds in its asset purchase program.

Here's what you need to know:

The refinancing
rate will be decreased by 5 basis points to 0.00%.

The interest rate on the marginal lending facility will be
decreased by 5 basis points to 0.25%.

The interest rate on the deposit facility will be decreased
by 10 basis points to -0.40%.

The monthly purchases under the asset purchase programme will
be expanded to €80 billion starting in April.

Investment grade euro-denominated bonds issued by non-bank
corporations established in the euro area will be included in the
list of assets that are eligible for regular purchases.

A new series of four targeted longer-term refinancing
operations (TLTRO II), each with a maturity of four years, will
be launched, starting in June 2016. Borrowing conditions in these
operations can be as low as the interest rate on the deposit
facility.

Following the decision, ECB President Mario Draghi will step up
to take questions from the press — that could be pretty crucial.

While the deposit rate cut itself doesn't come as a
surprise, the other measures are more extreme than expected.

Markets in Europe and across the world will be waiting with bated
breath to hear what Draghi says when he answers questions from
journalists.

Draghi will likely address why the bank's decided to
cut rates at the press conference, as well as why it
has extended its QE programme. The ECB says that Draghi
"will comment on the considerations underlying these
decisions."

It's also thought that Draghi might address the threat of low
inflation within the Eurozone at the press conference.

After the ECB's January meeting, Draghi pretty much
telegraphed a cut in the base deposit rate at today's
meeting, saying in his press conference: "It will be necessary to
review and possibly reconsider our monetary policy stance at our
next meeting in early March." He made the comment three times
throughout the press conference.

Some have questioned Draghi's wisdom in cutting rates even
further. Prior to the announcement, CEO of Austrian bank
Erste Bank, Andreas Treichl, told
the Financial Times that "savers are risk adverse
and capital markets are not very prominent" in his region,
meaning "lowering interest rates is not very helpful in
stimulating economic growth,” he said.